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TESARO Plunges on Study Results

Shares of TESARO, Inc. (TSRO) plummeted 24.75% to close the trading session on Dec 23, 2013 at $28.37 per share. The plunge followed the failure of TESARO’s oncology candidate rolapitant to demonstrate statistical significance with respect to the secondary endpoints in two phase III studies (one in patients receiving moderately emetogenic chemotherapy and the other in patients receiving highly emetogenic chemotherapy). The candidate is being developed to prevent chemotherapy-induced nausea and vomiting (:CINV).

TESARO said in its press release that the candidate successfully met the primary endpoints of a complete response (no vomiting in the absence of rescue medication) during the 24–120 hour period after chemotherapy in both the studies. TESARO still intends to seek U.S. approval for the candidate in the CINV indication in mid 2014. Another phase III study on rolapitant in cancer patients receiving highly emetogenic chemotherapy is underway.

Secondary endpoints in both the phase III studies included complete response in the acute (first 24 hours) and overall (0-120 hours) phases and the rate of no significant nausea. As per the top-line results announced, statistical significance was not demonstrated in any of the mentioned secondary end points.

The CINV market includes Merck & Co. Inc.’s (MRK) Emend which like rolapitant is a neurokinin-1 (NK-1) receptor antagonist. The failure of rolapitant to treat CINV effectively in the acute and overall phases is a dampener in our view.

We believe investor focus will remain on the detailed results from the three studies of the rolapitant program to determine more accurately whether the candidate offers any advantage over Merck’s marketed CINV therapy.